Technology in the form of automation and digital intermediaries like Uber are
fundamentally transforming the job market. Rather than try to stop the
unstoppable, we should think about how to put this new reality at the service of
our values and welfare.
In an important sense, the US economy is now at full employment: The
relatively tight labor market is causing wages to rise at an accelerating rate,
because employers must pay more to attract and retain employees. This has
important implications for policymakers – and not just at the Federal
Despite being a mainstay of macroeconomic theory for the past half century,
the Phillips curve often receives the death knell from various commentators.
These critiques often rely on results from data samples spanning relatively
short periods. Using the case of Ireland, this column argues that short-term
idiosyncrasies can explain the failure of the model in these contexts. Taking a
longer historical view, the Phillips curve remains a useful macroeconomic model,
at least in the Irish context.
The unprecedented period of coordinated loose monetary policy since the
beginning of the financial crisis in 2008 could have large unintended
consequences. In particular, institutional investors, such as pension funds,
have responded to near-zero interest rates by making riskier investments –
leaving them dangerously exposed.